B-188034, MAY 31, 1977

B-188034, MAY 31, 1977

PAYMENT MADE BY A MILITARY DEPARTMENT TO THE FEDERAL HOUSING ADMINISTRATION FOR MORTGAGE INSURANCE PREMIUMS ON THE HOUSE OF AN ACTIVE DUTY MEMBER UNDER THE AUTHORITY OF 12 U.S.C. 1715M WHICH ARE ERRONEOUS BECAUSE PAYMENTS WERE CONTINUED AFTER THE MEMBER SOLD THE HOUSE AND THUS BECAME A DEBT OF THE MEMBER, MAY BE CONSIDERED FOR WAIVER UNDER 10 U.S.C. 2774, SINCE THAT SECTION WAS INTENDED TO HAVE BROAD COVERAGE OF ALL PAY AND ALLOWANCES OTHER THAN TRAVEL AND TRANSPORTATION ALLOWANCES.

MAJOR GEORGE A. DESROCHERS, USA:

THIS ACTION IS IN RESPONSE TO CORRESPONDENCE DATED DECEMBER 6, 1976, FROM THE U.S. ARMY FINANCE CENTER (FILE REFERENCE FINCY-AB) FORWARDING FOR CONSIDERATION THE CLAIM OF MAJOR GEORGE A. DESROCHERS, USA, XXX-XX-XXXX, FOR REFUND OF AMOUNTS DEDUCTED FROM HIS MILITARY PAY AS THE RESULT OF A DEBT TO THE UNITED STATES WHICH RESULTED FROM MONTHLY PAYMENTS MADE BY THE ARMY TO THE FEDERAL HOUSING ADMINISTRATION (FHA) FOR MORTGAGE INSURANCE PURSUANT TO 12 U.S.C. 1715M DURING A PERIOD OF TIME IN WHICH HE WAS NOT ELIGIBLE FOR SUCH BENEFITS.

THE FILE INDICATES THAT IN JUNE 1971, THE MEMBER PURCHASED A HOUSE IN TUCSON, ARIZONA, FINANCING THE PURCHASE THROUGH A LOAN FROM A MORTGAGE BANKING COMPANY. IN CONNECTION WITH THIS TRANSACTION, HE SUBMITTED A "REQUEST FOR AND CERTIFICATE OF ELIGIBILITY" (DEPARTMENT OF DEFENSE FORM 802), IN ORDER TO OBTAIN PAYMENT OF FHA MORTGAGE INSURANCE PREMIUMS BY THE ARMY. ITEM 7 OF THE FORM, WHICH APPEARS IMMEDIATELY ABOVE THE MEMBER'S SIGNATURE, IS AS FOLLOWS:

"I HEREBY AGREE THAT IN THE EVENT I AM ISSUED A CERTIFICATE OF ELIGIBILITY AND SUBSEQUENTLY OBTAIN FINANCING PURSUANT TO SECTION 124, PUBLIC LAW 560, 83RD CONGRESS 'HOUSING ACT OF 1954' I WILL IMMEDIATELY NOTIFY MY COMMANDING OFFICER IN WRITING WHEN THE LOAN IS PAID-UP OR I TERMINATE MY OWNERSHIP OF THE PROPERTY SO FINANCED, OR UPON DISCHARGE, RELIEF FROM ACTIVE DUTY, OR RETIREMENT, EXCEPT WHEN I RE-ENTER ANOTHER PERIOD OF ACTIVE DUTY THE FOLLOWING DAY WITHOUT A BREAK IN SERVICE. THE EVENT I FAIL TO NOTIFY MY COMMANDING OFFICER, I FURTHER AGREE THAT ANY LIABILITY INCURRED BY THE MILITARY SERVICE OF WHICH I AM A MEMBER ON MORTGAGE INSURANCE PREMIUMS PAID SUBSEQUENT TO THE DATE OF TERMINATION OF MY ELIGIBILITY WILL BE REIMBURSED BY ME."

THE FORM SHOWS THAT ARMY AUTHORITIES CERTIFIED THE MEMBER WAS ELIGIBLE FOR SUCH BENEFITS AND THAT HIS LOAN WAS INDORSED BY THE FHA. IT APPEARS THE ARMY COMMENCED MAKING THE MORTGAGE INSURANCE PREMIUM PAYMENTS TO THE FHA SHORTLY AFTER THE JUNE 1971 PURCHASE, WHICH PAYMENTS CONTINUED THROUGH MAY 1974.

IT IS FURTHER INDICATED THAT THE MEMBER WAS REASSIGNED TO WEST POINT, NEW YORK, IN 1972 AND IN MAY OF THAT YEAR HE SOLD HIS HOUSE IN TUCSON, ARIZONA. IT APPEARS THE PURCHASERS FINANCED THEIR PURCHASE AT LEAST IN PART THROUGH ASSUMPTION OF THE MEMBER'S MORTGAGE. THE MEMBER STATES THAT AT THE TIME OF THE MAY 1972 SALE, HE SUBMITTED A FORM AT DAVIS-MONTHAN AIR FORCE BASE, ARIZONA, "NOTIFYING THE MILITARY THAT THE HOUSE WAS SOLD." THE MEMBER DOES NOT INDICATE WHERE OR TO WHAT AUTHORITY AT THE AIR FORCE BASE HE SUBMITTED THIS NOTIFICATION, AND IT DOES NOT APPEAR THAT SUCH NOTICE WAS EVER FORWARDED TO THE APPROPRIATE ARMY AUTHORITIES. AS A RESULT, THE ARMY CONTINUED MAKING MORTGAGE INSURANCE PREMIUM PAYMENTS TO THE FHA ON THE MEMBER'S BEHALF AFTER HIS SALE OF THE PROPERTY.

THE MEMBER STATES THAT ABOUT APRIL 1974 HE RECEIVED A LETTER FROM THE U.S. ARMY FINANCE AND ACCOUNTING CENTER, IN WHICH HE WAS ASKED IF HE STILL OWNED THE HOUSE IN TUCSON. AFTER HE REPLIED THAT HE HAD SOLD IT IN MAY 1972, THE FINANCE CENTER NOTIFIED THE FHA THAT THE ARMY WAS TERMINATING PAYMENT OF THE MORTGAGE INSURANCE PAYMENTS AFTER MAY 31, 1974, WOULD HAVE TO BE MADE BY THE MORTGAGE COMPANY. THE MORTGAGE COMPANY THEN APPARENTLY COMMENCED MAKING SUCH PAYMENTS TO THE FHA, AND THE AVAILABLE RECORDS SHOW THAT THE MORTGAGE COMPANY ADJUSTED THE ESCROW ACCOUNT OF THE CURRENT OWNERS AND BEGAN ASSESSING THEM ADDITIONAL AMOUNTS IN ORDER TO COVER THE FHA MORTGAGE INSURANCE PREMIUM PAYMENTS.

IN 1975 THE MEMBER WAS ADVISED THAT HE WAS INDEBTED TO THE GOVERNMENT IN THE AMOUNT OF $245.72. THIS AMOUNT REPRESENTED FHA MORTGAGE INSURANCE PREMIUMS PAID BY THE ARMY ON HIS BEHALF DURING THE PERIOD JUNE 1, 1972, TO MAY 31, 1974, THE PERIOD DURING WHICH HE WAS INELIGIBLE FOR SUCH BENEFITS. IT IS INDICATED THAT THIS AMOUNT HAS BEEN RECOVERED IN FULL THROUGH DEDUCTIONS FROM THE MEMBER'S MILITARY PAY.

THE MEMBER HAS FILED FOR A PARTIAL REFUND IN THE AMOUNT OF $225.24. CONTENDS THAT UNDER ARMY REGULATIONS, VARIOUS AUTHORITIES SHOULD HAVE CONTACTED HIM IN JUNE OR JULY 1972 TO INQUIRE IF HE STILL OWNED THE HOUSE IN TUCSON. HE CONTENDS THAT SINCE THESE AUTHORITIES FAILED TO MAKE THE REQUIRED INQUIRY HE SHOULD NOT BE HELD LIABLE TO MAKE RESTITUTION FOR IMPROPER FHA MORTGAGE INSURANCE PREMIUM PAYMENTS DURING THE PERIOD AUGUST 1972 THROUGH MAY 1974.

THE MATTER HAS BEEN FORWARDED TO THIS OFFICE AS A DOUBTFUL CLAIM. ARMY AUTHORITIES HAVE EXPRESSED THE OPINION THAT WHILE THE CLAIM DOES NOT APPEAR TO BE COGNIZABLE UNDER THE APPLICABLE STATUTES AND REGULATIONS, IT MAY WARRANT CONSIDERATION FOR SUBMISSION TO CONGRESS UNDER THE MERITORIOUS CLAIMS ACT. IT DOES NOT APPEAR THAT CONSIDERATION HAS BEEN GIVEN TO THE POSSIBILITY OF TREATING THE MATTER AS A REQUEST FOR WAIVER OF INDEBTEDNESS.

SECTION 124 OF THE HOUSING ACT OF 195,4, APPROVED AUGUST 2, 1954, 68 STAT. 603, AS AMENDED, 12 U.S.C. 1715M(1970), PROVIDES IN EFFECT, THAT THE DEPARTMENT OF THE ARMY MAY PAY MORTGAGE INSURANCE PREMIUMS ON LOANS INSURED BY THE FHA ON BEHALF OF ARMY MEMBERS OUT OF APPROPRIATIONS AVAILABLE FOR PAY AND ALLOWANCES DURING THE PERIOD OF HOME OWNERSHIP WHILE ON ACTIVE DUTY.

IT IS OUR VIEW THAT 10 U.S.C. 2774 (SUPP. II, 1972) AS ADDED BY THE ACT OF OCTOBER 2, 1972, 86 STAT. 758, IS BROAD ENOUGH TO PERMIT CONSIDERATION OF THIS DEBT FOR WAIVER AND THAT THE MEMBER'S CLAIM MAY PROPERLY BE BROADLY CONSTRUED AS CONSTITUTING A REQUEST FOR WAIVER UNDER THAT SECTION. THE WAIVER AUTHORITY PROVIDES IN PERTINENT PART THAT A CLAIM OF THE UNITED STATES ARISING OUT OF AN ERRONEOUS PAYMENT OF PAY OR ALLOWANCES, OTHER THAN TRAVEL AND TRANSPORTATION ALLOWANCES, TO OR ON BEHALF OF A MEMBER OR FORMER MEMBER OF THE UNIFORMED SERVICES, THE COLLECTION OF WHICH WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTEREST OF THE UNITED STATES, MAY BE WAIVED IN WHOLE OR IN PART. IN THIS RESPECT WE NOTE THAT THE MORTGAGE INSURANCE PAYMENTS MADE ON THE MEMBER'S BEHALF FROM JUNE 1972 THROUGHT MAY 1974, WHILE IMPROPER AND ERRONEOUS, WERE PAID FROM APPROPRIATIONS AVAILABLE FOR PAY AND ALLOWANCES AND WERE INTENDED TO BE AN EMOLUMENT OF THE MEMBER'S MILITARY POSITION. THE PAYMENTS THUS FALL WITHIN THE PURVIEW OF THE WAIVER STATUTE, SINCE FOR THE PURPOSES OF THAT STATUTE "PAY OR ALLOWANCES" REFER TO EVERY REGULARLY RECURRING OR OTHER ALLOWANCE OF ANY KIND THAT IS NOT A TRAVEL OR TRANSPORTATION ALLOWANCE. SEE H. REPORT NO. 92-195, 7 (1971).

THE FACTS CONTAINED IN THE RECORDS BEFORE US DO NOT PROVIDE A SUFFICIENT BASIS FOR A PROPER EVALUATION OF THIS CASE WHEN CONSTRUED AS A REQUEST FOR WAIVER OF INDEBTEDNESS. ALSO, THE DEBT HAS NOT BEEN CONSIDERED FOR WAIVER BY THE ARMY. SINCE THE DEBT IS SMALL ENOUGH TO PERMIT FINAL WAIVER BY THE SECRETARY OF THE ARMY, WE ARE RETURNING THE FILE FOR ADMINISTRATIVE ACTION UNDER 10 U.S.C. 2774 AND SUBCHAPTER 6, OF CHAPTER I, TITLE 4, CODE OF FEDERAL REGULATIONS. NOTHING HEREIN SHOULD BE CONSTRUED AS STATING AN OPINION WITH RESPECT TO THE MERITS OF THE WAIVER REQUEST.

IN VIEW OF THE ABOVE SUBMISSION OF THIS MATTER TO THE CONGRESS FOR CONSIDERATION IS NOT APPROPRIATE.